China’s economy expanded at its slowest pace in a year during the July–September quarter, as trade tensions with the United States and a sluggish property market weighed on growth. The world’s second-largest economy grew 4.8% from a year earlier, down from 5.2% in the previous quarter, according to government data released Monday.
The weaker performance marks the slowest annual growth since the third quarter of 2024. For the first nine months of 2025, China’s economy grew at an average annual pace of 5.2%, still within reach of the government’s full-year target of “around 5%.”
The slowdown comes as Beijing and Washington remain at odds over trade and technology. Uncertainty also looms over a potential meeting between Chinese President Xi Jinping and US President Donald Trump during a regional summit later this month.
Exports Hold Up Despite US Tariffs
Despite higher US tariffs on Chinese goods, overall exports have stayed relatively resilient. China’s global exports rose 8.3% in September — the strongest increase in six months — even as shipments to the United States plunged 27% from a year earlier. Exports of electric vehicles doubled during the month, and domestic passenger car sales rose 11.2% year-on-year, though the pace slowed from August’s 15% increase.
The National Bureau of Statistics said China still has a “solid foundation” to meet its annual growth goal but warned of mounting external challenges, including rising protectionism and continued trade friction.
Property Market Remains a Drag
A persistent slump in the property sector continues to dampen consumer demand and confidence. Residential property sales fell 7.6% in value in the first nine months of the year, while investment in factories and equipment slipped 0.5% last quarter. Ratings agency S&P forecasts nationwide new home sales will drop by 8% in 2025 and by a further 6–7% in 2026.
Industrial output grew 6.5% in September — the fastest since June — but retail sales slowed to 3% year-on-year, highlighting weak household spending. Analysts described consumer activity during October’s eight-day Golden Week holiday as “mildly disappointing,” reflecting fragile confidence.
Policy Response and Outlook
Economists say Beijing has room to introduce more measures to boost demand. “We are looking to see if there will be further steps to support consumption and the property market as the effects of earlier policies begin to fade,” said Lynn Song, chief economist for Greater China at ING Bank.
Analysts expect the People’s Bank of China to cut interest rates before the end of the year to encourage borrowing and investment. However, many remain cautious about 2026 prospects, with BNP Paribas economist Jacqueline Rong warning that property investment could continue to fall and that the recent artificial intelligence boom — which buoyed growth earlier this year — may start to cool.
